NRAM Possible Voluntarty Reposetion

stressed83

I'm looking for a little advice / guidance.
I bought my flat in 2007 in at peak time and have had an interest only mortgage for 10 years.
I've never been in a position to pay the mortgage as repayment.
I moved out of the property 5 years ago and rented it out due to having a horrible man upstairs torment me for years (the police were involved a lot)


In the time that I've rented the property to 3 couples. I've done minor cosmetic changes to the flat and left it ticking over in the hope that the property market would pick up and I could sell it.
I paid £120k for the flat and the mortgage is £110k


At the moment other flats in my block have been sold for £80k and £95k meaning that I am in negative equity and won't get nearly what I paid for my flat if I attempted to sell it.


The rental market where I live is terrible at the moment because the oil industry has crashed and I fear that trying to rent it again will mean that I won't have enough to cover the cost of the mortgage, in 2015 I was getting £650 per month and today I get £450 which only just covers the mortgage and I pay insurances etc out of my own pocket.


The other thing is that the property is in a terrible state now and needs at least £15k spent on it to get it to a reasonable standard to rent it again.


I am currently employed but I contribute towards my partners mortgage and if the property is empty I can't afford to pay the mortgage and pay towards my current home.
The added problem is I am a contractor and my job finishes at the end of the year and I have no idea how long I am going to be out of work (many of my friends have been unemployed due to the Oil downturn for 2 years+)


I guess what I'm looking to see if voluntary reposition is an option for me? or if that is the direction to go with the property?


My tenants have given me notice and in 1 months time the property will be empty.


I'm panicking and very stressed about the whole thing just now and have no idea what to do.


any advice / suggestions would be greatly appreciated.

antrobus

stressed83 wrote: »

..I guess what I'm looking to see if voluntary reposition is an option for me? or if that is the direction to go with the property?...

If the property is worth in the region of £80-95 k but you owe £110k, a voluntary repo will not make that shortfall go away. NRAM will chase you for the money.

Selling it off your own bat is likely to be cheaper. But you need to speak to NRAM.

JaneyLouWho

As someone who was repossessed voluntarily in 2009, I'd say do everything you can to either keep it or sell for as much as possible privately. The repo will hang over you for years and years if that's the option you take. Does it really need £15k spent, or can you do some minor repairs/updating and get it ready for a decent sale? You will need permission to sell for less than the mortgage value from the lender, and make arrangements to pay back the negative equity, but that will be much better in terms of future finances than being repossessed and having a shortfall.
Good luck, its tricky times and you'll have to put in a bit of effort, I just wish I'd asked this question in 2009!

silvercar

Do NRAM know that you don't live in the property?

I would start by having a conversation with NRAM on the possibility of them agreeing to you selling and taking out an unsecured loan to cover the shortfall. Without their consent you won't be able to sell for less than clears the mortgage, with not enough income to cover an unsecured loan you will struggle in the short term.

If it is at all possible I would try and hold things together until property prices rise enough in your area to cover the shortfall.

Don't blame yourself, you have been incredibly unlucky that prices have fallen in your area over 10 years.

stressed83

The building as a whole had a leak in the main roof which then damaged all properties and caused mold, the flat needs the ceiling taken down, most of the walls and that then means that the bathroom and kitchen will need to be taken out and replaced, my £15k was a very cheap estimate just by looking at how much those things cost.

Caz3121

stressed83 wrote: »

The building as a whole had a leak in the main roof which then damaged all properties and caused mold, the flat needs the ceiling taken down, most of the walls and that then means that the bathroom and kitchen will need to be taken out and replaced, my £15k was a very cheap estimate just by looking at how much those things cost.

why is this not being dealt with through insurance/freeholder?